America Is Losing Indonesia—And It May Be Too Late

The world's fourth-largest nation by population is slipping through America's fingers. With 270 million people and Southeast Asia's largest economy, Indonesia is quietly pivoting toward China and Russia while Washington watches from the sidelines, distracted by other priorities.

The numbers tell a stark story: zero major agreements signed in 2025, no breakthrough on critical minerals trade, and a relationship that has arguably entered "stagnation and stasis," according to diplomatic sources.

The Tariff Wake-Up Call

The warning signs flashed bright when the Trump administration slapped a 32% tariff on Indonesian goods shortly after taking office in January 2025. Though later negotiated down to 19%, the damage to trust was already done.

But tariffs were just the symptom. The real problem runs deeper: Indonesia "simply isn't featured prominently" in the administration's Indo-Pacific strategy, according to a U.S.-based diplomat. While America pours diplomatic capital into Japan, South Korea, Taiwan, and the Philippines—all seen as crucial to containing China—Indonesia has become an afterthought.

This marks a dramatic reversal from the Obama years, when U.S.-Indonesia relations peaked with the 2010 Comprehensive Strategic Partnership (CSP). Even the 2023 CSP renewal under Biden and Jokowi was criticized as "symbolic over substance," lacking concrete commitments on economic, security, and cultural cooperation.

The Expertise Vacuum

Perhaps more troubling than policy neglect is America's shrinking knowledge base about Indonesia. The Trump administration's mass layoffs across the State Department, Pentagon, and National Security Council have "eliminated virtually all remaining American professional civil servants with substantive expertise on Indonesia," according to the analysis.

This institutional memory loss couldn't come at a worse time. Few Americans understand Indonesian politics or foreign policy priorities, creating a dangerous blind spot for a nation that could tip the balance of power in Southeast Asia.

The absence of ambassadors in both capitals—the U.S. hasn't had a permanent envoy in Jakarta since recalling Kamala Lakhdir in April 2025—symbolizes this mutual neglect.

Everything's Transactional Now

Both Indonesian and American analysts interviewed for this story reached the same conclusion: U.S. foreign policy has become ruthlessly transactional. Strategic partnerships and historical commitments matter less than immediate economic and political benefits.

For Indonesia, this means its value to America is measured solely in critical minerals, ship transit rights, and other tangible assets. Unlike Japan and South Korea, which anchor America's security architecture, or Taiwan and the Philippines, which serve clear strategic purposes in containing China, Indonesia lacks an obvious role in Washington's playbook.

Indonesia is responding in kind. President Prabowo has pursued what critics call "highly personalized diplomacy" lacking coherent strategy, removing tariffs and local content requirements to attract American investment while demanding tariff-free access for palm oil, tea, and coffee exports.

Military Ties Under Strain

The relationship's deterioration extends to defense cooperation. While "soft" collaboration like the annual Super Garuda Shield exercises continues, "hard" cooperation faces uncertainty.

Indonesia's long-planned purchase of 24F-15EX fighter jets exemplifies the problem. Though the Defense Ministry officially maintains its commitment, Boeing states it hasn't formally entered a contract, leaving the deal in limbo.

Indonesia's non-aligned foreign policy adds another layer of complexity. The nation's refusal to enter formal security alliances with any country makes major defense partnerships structurally difficult.

China and Russia Fill the Void

While America looks elsewhere, China and Russia are making their move. The economic deals Indonesia signed with both rival powers over the past year signal a potential realignment that could reshape Southeast Asian geopolitics.

This shift matters because Indonesia isn't just another country—it's ASEAN's de facto leader and a swing state in the great power competition. If this pivotal nation "begins to choose sides in the increasingly fierce geopolitical rivalry," as the analysis warns, it would be "to the detriment of the United States' long-term interests in the Indo-Pacific."

Glimmers of Hope

Not everything is bleak. American companies, particularly in critical minerals, still see Indonesia as a "robust prospective market." Educational cooperation remains strong, highlighted by Georgetown University School of Foreign Service opening its Jakarta branch campus in January 2025—the first U.S. higher education institution to establish a branch in Indonesia.